4 March 2002 Database software giant Oracle has surprised stockholders by issuing a profits warning for its fiscal third quarter. It says that it will post flat sales and lower than forecast earnings in its quarter to the end of February 2002. It attributes the disappointing figures to a continued slowdown in Asian markets.

The news dampened hopes of a recovery in the beleaguered technology sector, which some analysts had tentatively suggested was showing signs of an upturn. Oracle had said that higher sales in Europe and the US could not offset lower demand for its products in Asia.

The Redwood Shores, California-based software vendor is particularly reliant on corporate IT spending and has been badly hit by the recession and the continued freeze on IT budgets. It underscores the fact that many organisations are delaying new project roll-outs in order to save money.

Chief financial officer Jeff Henley said he expected third quarter sales to be broadly in line with second quarter figures. In this period, net profits fell 12% to $549.5 million (€635.6m) on sales down 11% to $2.36 billion (€2.7bn).

Analysts have interpreted the announcement as evidence that Oracle is still struggling to get back on its feet. The company has either lowered estimates or missed forecasts for five consecutive quarters, they say. Oracle will release its results on 14 March.